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Fair pay laws on the horizon?

According to the American Association of University Women (AAUW), female workers earn 79 cents for every dollar earned by their male counterparts. For women of color or women with children, this number is even lower. There are many movements across the country demanding equal pay for women, including one right here in Ohio. On Jan. 1, 2016, California’s Fair Pay Act (The Act) became effective, and many employers are wondering- is my state next?

Some commentators have referred to California’s new law as the most aggressive and strict equal pay law in the country. The Act requires employers to pay both genders equally for “substantially similar work,” a term that has yet to be defined. Under the new law, “substantially similar” work can include jobs at different facilities and jobs in different categories. For example, a female housekeeper might be able to make a claim under the new California law that a male janitor is wrongly paid more than she is by arguing that their duties are “substantially similar.” The law also contains a strong retaliation provision, barring employers from discriminating against workers who discuss their salaries. In order for employers to prevail against these claims, they must show that the pay differential is based on seniority, merit, a system of earnings by quantity or quality of production, or bona fide factors such as education, training or experience, as long as those factor are not the result of a sex-based differential in compensation, are job related to the position, and are consistent with business necessity. The law applies to all workers in California, regardless of size or where they are based.

While the Federal government currently regulates wage discrimination under the Equal Pay Act, there has also been a push at the Federal level to strengthen this law. The Paycheck Fairness Act, S.B. 862 is currently pending in a Senate Committee, although two similar versions of this bill have failed to pass the senate twice. The Paycheck Fairness Act would amend the Equal Pay Act and would allow for compensatory and punitive damages, class actions for pay inequity, prohibit retaliation against workers who share salary information, and would require that an employer who claims that pay differentials are based on factors “other than sex” demonstrate those factors are related to job performance and consistent with business necessity and that those factors account for the entirety of the pay differential.

In Ohio, House Bill 330 has been pending in the legislature since the fall of 2015. This law would require:

State and local governments to determine the value of comparable work across job categories and to eliminate lower pay that is sometimes associated with “women’s work”

businesses that receive state contracts or state economic incentive funds to be certified with an Equal Pay Certificate indicating that women employees at the company have access to the same opportunities and pay as their male counterparts as well as information from the company about how their salaries compare with male employees

No retaliation against employees for sharing salary information amongst themselves.

Employers who have employees in California should evaluate their pay practices immediately in an effort to uncover any gender pay inequity and ensure they are complying with California law. For those employers who don’t have employees in California, the law in the remaining states is constantly changing and it is important to keep apprised of new developments in each state until the Federal government passes uniform regulation.

Porter Wright Morris & Arthur LLP

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